Back in April, my colleague Mike Palmisciano published a blog post noting the decision of the Court of Appeals of the Federal Circuit to rehear In re Tam en banc in order to address the sole issue of whether the bar to registration of disparaging marks in 15 U.S.C. § 1052(a) violates the First Amendment. Mike noted that a decision that Section 2(a) does violate the First Amendment would open the door to registration (or maintenance) of marks such as REDSKINS, KHORAN, and SQUAW VALLEY. Now it appears that Judge Gerald Bruce Lee of the U.S. District Court for the Eastern District of Virginia may have knocked out the First Amendment argument once and for all.

In an opinion issued today, Judge Lee ruled, inter alia, that the Trademark Trial and Appeal Board’s decision to cancel six registrations for Pro-Football, Inc.’s REDSKINS trademarks did not even implicate the First Amendment because: (a) cancellation of the registrations does not prohibit PFI’s use of the “disparaging” trademarks; and (b) the trademark registration program is “government speech” and, therefore, is not subject to the First Amendment. Pro-Football, Inc. v. Blackhorse, et al., Case No. 1:13-cv-01043-GBL-IDD (E.D. Va., July 8, 2015). The opinion is available at http://assets.law360news.com/0676000/676857/Redskins.pdf. (The decision also analyzes PFI’s Fifth Amendment argument, the question of whether the REDSKINS mark is disparaging, and whether the doctrine of laches bars the Blackhorse defendants’ claims, but those issues are outside the scope of this blog post).

In denying PFI’s argument that its trademark registrations were protected speech, Judge Lee distinguished some well-known First Amendment cases cited by PFI. Clatterbuck v. City of Charlottesville, 708 F.3d 549 (4th Cir. 2013) held that a city ordinance prohibiting individuals from begging for money was unconstitutional. The court observed that the ordinance in question in Clatterbuck prohibited actual speech whereas the cancellation of PFI’s registrations did not prevent it from continuing to use the REDSKINS name. The court similarly distinguished Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011) (finding unconstitutional a Vermont statute prohibiting, without the prescriber’s consent, pharmacies from selling prescriber-identifying information, pharmacies from disclosing the information for marketing purposes, and pharmaceutical manufacturers from using the information for marketing purposes) and Snyder v. Phelps, 131 S. Ct. 1207 (2011) (reversing jury decision against the Westboro Baptist Church’s picketing of soldiers’ funerals as WBC’s speech was in a public place and on a matter of public concern).

PFI also argued that trademark registrations themselves are “commercial or private speech” subject to First Amendment protection, as opposed to government speech, which is not. The court dismissed the commercial speech argument by noting that proposal of a commercial transaction is the test for identifying commercial speech and that approval of a registration and subsequent publication in the Official Gazette does not propose a commercial transaction and, therefore, is not commercial speech.

Relying extensively on Walker v. Tex. Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015), a case holding that the State of Texas did not violate the plaintiff’s First Amendment rights when it refused to approve a state license plate design bearing the confederate flag, the court found that trademark registration is also government speech. In Walker, the Supreme Court held that license plates are government speech because: (a) “insofar as license plates have conveyed more than state names and vehicle identification numbers, they long have communicated messages from the States”; (b) the public closely identifies license plates and their designs with the state; and (c) license plates are essentially government IDs, and the state maintains direct control over the messages the plates convey.

Judge Lee applied the Walker test as follows: (a) registration communicates that the federal government approved the trademark; (b) the public closely associates trademark registration with the federal government because it associates the ®symbol with the federal government; and (c) the federal government exercises control over the federal registration program. His analysis strikes this writer as somewhat tortured, but he offers additional support for his conclusion via the Fourth Circuit’s Mixed/Hybrid speech test and the Supreme Court’s decision in Rust v. Sullivan, 500 U.S. 173 (1991) (holding that the government may determine the contents and limits of its programs).

While a Virginia federal district court decision is not binding on the Federal Circuit, Judge Lee’s analysis may well be a preview of the conclusions to be reached by that court. For the moment at least, the door to registration of scandalous and smutty trademarks remains closed.

Not long ago a colleague brought to my attention a “mea culpa” published on the Down The Road Beer Company website, www.downtheroadbrewery.com. Apparently the brewery ran into a bit of trouble with the Alcohol and Tobacco Tax and Trade Bureau, the federal agency tasked with, among other things, policing product labeling for products containing alcohol. In designing a label for its “Down The Road Rasenmäher Kölsch,” the brewery broke the rules by depicting the character “Hans Mowermann” operating a power lawn mower while holding up a large mug of, presumably, Down The Road Rasenmäher Kölsch. As we all (should) know, operating machinery while under the influence of alcohol ist verboten!

The article got me to thinking. During my frequent travels to Cologne, Germany, I sampled my fair share of the local brew. On those trips my local friends regaled me with stories of the origins and traditions of their beloved Kölsch. If you’re really interested, the German Beer Institute has a nice summary here. One of the key things I learned is that “Kölsch” is an acknowledged regional designation in Germany. Specifically, in 1986 the directors of 24 Kölsch breweries signed the “Kölsch Convention,” stating that Kölsch is both a kind of beer and a geographic designation of origin. As a result of the convention, only these two dozen or so brewers can legally call their beers “Kölsch.” “Kölsch” is also a protected geographic indication in the European Union, (Trust me, that’s really what this means. If you doubt me there’s always Google Translate!).

So, if “Kölsch” is a protected geographic designation, how can American breweries call their beers “Kölsch?”

Geographic designations enjoy protection under U.S. trademark law as both certification marks and collective marks. Some well-known examples of protected regional designations include ROQUEFORT, DARJEELING, BORDEAUX, COGNAC, ZELLER SCHWARZE KATZ, FRANKFURTER APFELWEIN, and DEUTSCHES ECK. DEUTSCHES ECK is a designation for beer from the middle Rhine and lower Mosel areas of Germany. U.S. courts have enforced such geographic designations on theories of both trademark infringement and false advertising (false designation of origin). While most of the reported cases involve registered certification or collective marks, the Trademark Trial and Appeal Board enforced common law rights in the “Cognac” designation in Institut National Des Appellations d’Origine v. Brown-Foremen Corp., 47 USPQ2d 1875 (TTAB 1998).

It seems clear that the Kölsch Convention (or any other entity the can claim title to the Kölsch designation) could move to protect rights in the Kölsch designation in this country, but it has not yet done so. Nevertheless, should that change in the future, artwork issues could become the least of worries for American craft brewers when it comes to brewing and selling a “Kölsch” beer.

In a long-awaited move, the U.S. Court of Appeals for the Federal Circuit is set to consider whether the Lanham Act’s Section 2(a) bar to registration of disparaging marks violates the First Amendment.

On Monday, the Federal Circuit vacated its April 20, 2015 panel opinion in In re Tam, in which it affirmed the USPTO’s refusal to register the mark THE SLANTS under Section 2(a). The mark had been applied for by the leader of an eponymous Asian American dance rock band in connection with “entertainment in the nature of live performances by a musical band.” In affirming the USPTO’s refusal, the Federal Circuit panel pointed to dictionary definitions which “universally characterize the word ‘slant’ as disparaging, offensive, or an ethnic slur when used to refer to a person of Asian descent.” Moreover, the panel held that it was bound by precedent from considering a First Amendment challenge to the constitutionality of Section 2(a).

Simultaneous with the panel’s decision, Judge Kimberly Ann Moore issued 24 pages of “additional views” in which she argued that “[t]he time has come” to reexamine the constitutionality of Section 2(a). According to Judge Moore, trademarks can function as protected commercial speech. By denying federal registration to disparaging marks, Section 2(a) empowers the USPTO to make “a moral judgment based solely and indisputably on the mark’s expressive content.” Yet, in Judge Moore’s view, the government has not demonstrated a substantial interest in barring the registration of disparaging marks. Judge Moore’s opinion dismisses the traditional arguments in favor of Section 2(a)—discouraging the use of offensive marks and insulating the government from being seen as giving its imprimatur to disparaging terms—as insufficient to justify the bar to registration.

The forthcoming en banc ruling will likely have significant implications for trademark applicants. If the Federal Circuit rules that Section 2(a)’s bar on registration of disparaging marks is unconstitutional, then a door to registration will open for marks like REDSKINS, KHORAN, and SQUAW VALLEY—all of which have been rejected or cancelled under Section 2(a). Moreover, although the en banc rehearing is limited to the issue of disparaging marks, it is likely that the court’s ruling will encompass scandalous and immoral marks as well. Indeed, Judge Moore notes that government “disapproval of the message” is the basis for denying registration of many scandalous marks that are not obscene, including BUBBY TRAP for brassieres and COCK SUCKER for rooster-shaped lollipops.

Today the Supreme Court announced its decision in B&B Hardware, Inc. v. Hargis Industries, Inc. B&B Hardware (B&B) sells a fastener product in the aerospace industry under the trademark “Sealtight,” which it registered in 1993. Hargis Industries (Hargis) sells self-drilling screws under the mark “Sealtite” in the construction industry. After Hargis applied to register its mark in 1996, B&B opposed the application successfully and also sued Hargis for infringement. In that action B&B argued unsuccessfully that Hargis was precluded from litigating the likelihood of confusion issue due to the prior TTAB ruling. The Eighth Circuit affirmed the District Court’s holding.

The Supreme Court addressed the issue of whether a ruling by the Trademark Trial and Appeal Board (TTAB) on the issue of likelihood of confusion was entitled to preclusive effect in later litigation. The Court held that the TTAB decision should be given preclusive effect if the ordinary elements of preclusion established in prior law are met. In reaching its decision the Court found, among other things, that the standard for determining likelihood of confusion in connection with the registration decision is essentially the same as the standard applied in infringement analysis. Specifically, Justice Alito, on the behalf of a 7-2 majority, writes:

“If a mark owner uses its mark in ways that are materially the same as the usages included in its registration application, then the TTAB is deciding the same likelihood-of-confusion issue as a district court in infringement litigation. By contrast, if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue. Thus, if the TTAB does not consider the market-place usage of the parties’ marks, the TTAB’s decision should ‘have no later preclusive effect in a suit where actual usage in the marketplace is the paramount issue.’ 6 McCarthy §32:101, at 32-246.”

We will leave analysis of the Court’s reasoning to others and, instead, consider a pair of tactical considerations that may now be relevant to litigation strategy as a result of this decision.

How does the Supreme Court’s Decision Affect the Choice Between Proceeding in Court versus the TTAB?

If an applicant or opposer (or registrant or cancellation petitioner) is as or more concerned with use of a mark as opposed to simply registration, the stakes attendant to proceeding solely before the TTAB are now potentially much higher as an adverse decision on registration could preclude a later action to enjoin use of a mark in commerce. From a practical perspective, that means that litigants may have little choice but to treat the TTAB proceeding as they would a district court proceeding and bring all relevant evidence to bear, including, inter alia. expensive survey evidence. While TTAB proceedings are traditionally considered a more “economical” means of obtaining a desired end, the cost difference between such proceedings and district court litigation is likely to narrow.

How Does the Supreme Court’s Decision Affect Decisions on Evidentiary Submissions in TTAB Proceedings?

While the temptation to introduce as much “relevant” evidence as possible may be increased, so too has the risk of going too far and introducing marketplace usage evidence that might not be relevant to the limited issues considered by the TTAB. The Supreme Court’s ruling is limited to situations where the usages adjudicated by the TTAB are materially the same as those before the district court. The key distinction between TTAB and district court infringement cases is that the Board only determines issues of registrability while the courts can determine both the right to use and the right to register. The TTAB generally focuses on the information contained in the four corners of the applications/registrations at issue and will often not consider other “market” evidence. On the other hand, courts typically consider evidence showing how the marks are actually used in commerce. If the use reflected in the PTO filings and the actual use of a mark in commerce are essentially the same then B&B teaches that the TTAB decision is likely to be binding on the court. Thus, if the parties stick to argument and evidence that is clearly relevant to the limited TTAB inquiry then the preclusive effect of the final ruling should be clear to all.

But what happens if an aggressive TTAB litigant introduces substantial evidence of marketplace use that goes beyond the scope of the use reflected in the PTO filings? Has that litigant inadvertently expanded the scope of the TTAB ruling and the scope of “usage” addressed in that ruling? The answer to this question is unclear. Perhaps there is no issue if the Board expressly rejects such evidence as irrelevant and states that it was not considered in reaching the decision. However, if the Board considers the evidence or does not comment on the evidence at all, the other party could argue that the “usage” for purposes of the TTAB ruling is as broad as that shown in the evidence submitted at trial and that the scope of preclusion has expanded accordingly. This result could be devastating in later litigation between the parties.

Look here for updates as further implications of the Court’s decision become clear.

Does Taylor Swift plan to become the Martha Stewart of the music world?

It’s a question asked half in jest, but something to consider given Swift’s recent applications to apply trademarks of her song lyrics to a variety of household items. The phrases from her latest album include “this sick beat” and “Party Like It’s 1989,” prompting some artists to accuse Swift of trying to “own” common words. But a closer look might persuade them she actually has an intriguing trademark registration strategy.

It is highly unusual, if not unprecedented, for a recording artist to trademark lyrics (as opposed to album titles, tour titles, and the artist’s own name which are common subjects for registration). The more commonly registered marks are typically registered for performances and related services, and for the various categories of souvenirs you expect to find for sale at the concert venue and online. Ms. Swift’s filings are further unusual due to the breadth of items to be covered (more on that below) and for the fact that instead of filing one application for the 16 classes, she submitted 16 individual applications for the two marks. She also applied to register a handful of other lyric-based marks in far fewer classes and for more traditional goods and services.

Filing that many individual applications when one would have done the job is cumbersome and costly. It is also one way to ensure that an application isn’t blocked in all classes due to a problem in one or more individual classes. But the strategy is also a tipoff. Perhaps her representatives determined it would be easier to license these different categories if there were separate trademarks. Or maybe she made multiple filings purely for defensive purposes and she has no intention of putting the phrases on the items she’s listed in the applications. She may merely be acting to keep others from registering the phrases for their own merchandise.

Skeptics could certainly point to recent actions by her lawyers to support the negative view. They have been aggressively protecting trademarks she already owns. They’ve gone after sellers on the online site Etsy, who infringed by selling unofficial Swift goods including a tee-shirt that was printed with a lyric from one of Swift’s songs. But filing separate applications is actually an approach Swift’s lawyers have used in the past when registering her name, initials, and album titles.

Intent to Use

Trademark applications can be filed based on either “actual use” of a mark in commerce or as an “intent to use” as a mark in commerce. All of Swift’s recent applications are based on intent to use. That means that if they are approved she’ll receive a “notice of allowance” instead of a trademark registration. She’ll then have six months to file a statement that says she’s using the trademark on all of the goods in a given application as intended. If that is not the case, she’ll have the option to file for a six-month extension and can actually apply for and receive up to five additional six-month extensions. She can also delete items from the application or divide the application in order to obtain registration for those goods in actual use while leaving the remainder of the goods subject to a separate intent to use application.

Typically someone files for an extension when they have continued to take steps towards using the mark but have not yet sold anything in interstate commerce. It is not unheard of, however, for applicants to keep their applications alive simply to keep at bay others who want to use the trademark for a similar purpose. It’s not illegal to use extensions to stymie competitors, but there must be a bona fide intent to use the trademark with all of the goods or services listed in the application, and the applicant must truthfully represent that she is continuing to take steps towards using the mark in commerce. The point of adopting the “intent to use” system in the United States in 1989 was to prevent applicants from “warehousing” trademarks. Before then, consumer goods companies in particular would often ship a handful of sample products across state lines and then file for trademark registration claiming that the token shipment demonstrated “use.”

Though submitting 16 individual applications for 16 classes is unusual, it is consistent with the way Swift’s lawyers handled older marks. That suggests she probably seeks these trademarks for licensing purposes. In the past she has done this with her name and her album titles. That’s common because album titles often become the names of tours and the basis for the merchandise that is available at concerts or to order from her online store.

The subject matter this time is much different. In one class she has applied to trademark, the phrase “this sick beat” and “Party Like It’s 1989” on beverage ware, cookware, glassware, kitchenware, household utensils, hair brushes, napkin holders and candle holders, among other items. Ordinarily you don’t buy those items at a concert.

One songwriter expressed his resentment of Swift’s trademark campaign by creating a song comprised entirely of the lyrics “this sick beat.” But beyond that, how could someone challenge what she’s doing? Imagine that you produce novelty napkin holders imprinted with the phrase “this sick beat.” After you go to market you come to discovered Swift’s application to register the trademark for napkin holders. You’d have a number of options to defend your right to sell. If your use commenced before the filing date of Swift’s application, you could oppose her registration (or rebut an infringement claim) by arguing that you used the phrase first on napkin holders and that her later use does not trump your common law rights. On the other hand, should your first use commence after Swift’s filing date, you could attack her registration on grounds that she lacked a genuine intent to use the phrase on napkin holders at the time she filed the application and was only hoarding the trademark to prevent you and others from using it. Of course that argument will only succeed if Swift does not sell appropriately branded napkin holders yet fails to remove this item from her trademark application before a registration issues.

In reality, you typically don’t find recording stars in controversies over napkin rings or pot holders. Nor can we assume that Taylor Swift is taking her business empire in a new direction. But by understanding the trademark filing process we see she is trying to protect her options. Watch out Martha!

Lawrence R. Robins is a partner in the Intellectual Property Group of Sullivan & Worcester (Boston, New York, London, Washington, DC), specializing in trademark and copyright clearance, prosecution, maintenance, and litigation. Any seemingly negative implications to the contrary, he is a big Taylor Swift fan! For more information, visit www.sandw.com.

In a likelihood of confusion claim, two of the main factors considered (among others) are (1) similarity of the marks, and (2) relatedness of the goods using those marks. On its face, OLD OX bears little resemblance to RED BULL; the marks do not sound or look the same. Instead, Red Bull is relying on the similar meanings of the marks; that is, the name of a bovine animal, preceded by an adjective. Whether the average customer would actually confuse the source of two products as the same is typically a relatively straightforward inquiry. Insofar as the relatedness of craft beer and energy drinks, though, the question becomes more complex. The scope of products produced by and associated with microbreweries is increasingly expanding from small-batch beers to distilled spirits, wines and sodas. And it may be the potential of small, local craft breweries that that has Red Bull rushing to protect its mark.

In its defense, though, if not Red Bull, then who will protect and enforce its rights to use its marks? The Lanham Act’s double-edged sword is that trademarks do not have clearly delineated boundaries; on the one hand, it permits more expansive trademark rights, but on the other, there may be increased likelihood of confusion around the source of similar marks. The megabrand may indeed be concerned about the potential of increasingly popular small beverage producers. (This is not, after all, Red Bull’s first rodeo: in 2013, it filed a similar complaint against UK-based microbrewery Redwell Brewing, claiming the “Redwell” mark was confusingly similar because it started with ‘Red’ and ended with two ‘l’s.’ Ultimately, Redwell agreed it wouldn’t make energy drinks, and Red Bull withdrew its claim.) If Red Bull doesn’t enforce its rights to use its marks, the company could lose its rights in the marks altogether.

Insofar as how the foam will flatten in this battle of the beverages, stay tuned – Trending Trademarks will keep you up to date on any developments. In the meantime, to better understand how you can police and protect your trademark rights, do not hesitate to contact one of our IP attorneys.

Knock-off designs remain the bane of the designer’s existence and U.S. law still provides little in the way of intellectual property protection. While many fabric designs meet the threshold of creativity necessary for protection, clothing designs themselves are functional and not subject to copyright or design protection. Thus, a new design that debuts on a Paris runway in January is likely to appear in knock-off form in a discount retail outlet only a short time later.

In the article linked below, published in the January 31, 2015 issue of the Wall Street Journal, writer Meenal Mistry describes a new tactic in the war—highly inventive, original fabrics that are so complex and expensive to produce that economical knock-offs are nearly impossible to sell profitably. As for the prices for these exotic creations? Read on.

In a unanimous decision, the U.S. Supreme Court held this week that trademark tacking is an issue of fact to be addressed by the jury, and not a question of law to be addressed by judges.

The doctrine of trademark tacking lets a mark holder ‘tack’ the use of a pre-existing mark to a new mark with respect to priority of use; this allows a mark holder to modify its mark over time without losing that priority. The doctrine is available in situations where the two marks in question are similar enough to be deemed “legal equivalents”. Said another way, the newer mark cannot be materially different from the older one, but must extend the preexisting commercial impression of the older mark. The question presented before the Court was whether it should be the jury or the court who makes this determination.

As Justice Sotomayor stated in her opinion, “[b]ecause the tacking inquiry operates from the perspective of an ordinary purchaser or consumer, we hold that a jury should make this determination… [The] application of a test that relies upon an ordinary consumer’s understanding of the impression that a mark conveys falls comfortably within the ken of a jury.”

This decision does not change the law with respect to what constitutes trademark tacking; what it does, however, is increase the cost of asserting a trademark tacking claim or defense. Arguments presented to juries are far more expensive and difficult to prepare than those presented to judges, so litigants who seek to slow down the pace or increase the cost of trademark litigation will welcome the Hana Financial decision. Likewise, even though the Supreme Court recognized that judges could still rule on trademark tacking claims in the context of, for example, a motion for summary judgment, the Court’s holding sends a signal to judges that, when in doubt, they should deny the motion and let the jury decide at trial.

The case is Hana Financial Inc. v. Hana Bank, case number 13-1211, in the Supreme Court of the United States.

Recently, the Coca-Cola Company sought to register two hashtags as trademarks: #cokecanpics and #smilewithacoke. For those who may wonder why: various online social networking services (like Twitter, Instagram, and Pinterest, to name a few) enable users to search a word or phrase preceded by a hash or pound sign (#) to identify postings on a specific topic. Hashtags are used to promote brands, campaigns, ideas or events, and trending topics can be identified by frequency of use in their respective online communities.

Coca-Cola is not a pioneer in this area; other companies have successfully registered hashtags with the USPTO. However, the hashtag’s legal status remains murky, and is considered a leading legal issue facing marketers in this new year. Plus, as with any trademark, registration can be a lengthy and potentially expensive undertaking. So, is it worth registering, particularly when its legal status is unclear?

To start, a hashtag (i.e., not just the hash sign, but the hash sign followed by a registerable word or phrase – the hash sign alone would likely need to be disclaimed as it generally adds no source-identifying significance) can be registered just like any other mark, and the traditional rules apply.

A hashtag cannot include a mark that is already in use (for example, if anyone but Coca-Cola tried to register #cokecanpics the trademark application would be rejected);

The class of goods or services affiliated with the hashtag must be specified in the application (so, one party can’t prevent another party from using a similar hashtag in connection with unrelated products or services); and

The trademark application must include acceptable specimens of use (for example, instances of the hashtags featured on packaging, labels, or in stores, catalogues or webpages where the product is sold).

However, we enter a grey area when users use those trademark-protected words or phrases, even if they are subject to applicable trademark law: “[a]lthough Twitter may review reports of confusing keywords, we may not disable keywords in every case.” This, after all, is the very basis of social media; a collaborative forum for sharing brands, campaigns, ideas or events. By registering a hashtag, just as with any other mark, a company could prevent competition from using the same or similar hashtags, but it does not prevent social media users from using it (and in some cases, in a way that serves against a company’s interest). Also, US trademark law permits others to use trademarks without authorization from the trademark owner for “nominative use,” in situations where that unauthorized user is using the mark to accurately identify the product. For example, an individual who uses the hashtag #cokecanpics in connection with photos of actual cans of Coca-Cola may be protected from liability. See, e.g., New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302 (9th Cir. 1992).

The use of trademarked hashtags in platforms based on the culture of widespread sharing raises big questions for brands struggling to understand intellectual property rights and boundaries, particularly with respect to where intellectual property laws, and laws of privacy and publicity, may or may not apply.

So, can Coca-Cola register its two new hashtags as trademarks? Certainly. Is it worth the time and expense for Coca-Cola to do so? That depends on how Coca-Cola plans to use the hashtags. Realistically, there is no guarantee that social media campaigns will generate increased revenues, even if the campaign is a successful one. That said, if there is an intellectual property interest in the mark (i.e., the mark has value – such as use on packaging and marketing materials) beyond just a temporary hashtag on Twitter, registration with the USPTO may certainly be a worthwhile effort. To discuss this topic further, please contact the author at nlederman@sandw.com.